Buying Student Rentals for Your Kids – Mistakes, Wins, and How to Do It Well

by Nick Gentle on Aug 11, 2025
Article appears under: About Property Investment, Investment Strategy

Today I want to talk about student rentals, and in particular, the strategy where parents buy a property in a university town for their children to live in while studying.

It’s a popular approach to property investment, often taken by people who wouldn’t normally call themselves “investors.” The motivation is usually a mix of saving money, helping the kids out, and knowing exactly what kind of home they’ll be living in. If you’ve got two or three children planning to attend university, it can make even more sense.

The problem is, many parents in this situation end up buying a property they’d never call an investment if their child wasn’t going to live in it. And that’s a missed opportunity. My philosophy is: if you’re going to buy a rental, you might as well make it a good one.

Why It Is a Great Strategy

Buying a student rental can be a fantastic long-term play if done right. Because it’s a “forced savings” approach, buying smart can set you up for both your child’s university years and your own retirement.

I own student rentals myself and deliberately renovate them to the high end of the market—warm, dry, ventilated, insulated, two bathrooms for every four bedrooms, and good outdoor spaces. As a result, students stay for years, and the yield makes sense.

If you hold a well-bought, well-rented student property over a couple of university cycles (say, for multiple children), and then keep it as a P&I “set and forget” investment, you could be looking at a mortgage-free property in short time—a massive boost to your retirement portfolio.

Common Mistakes

1. Ignoring the numbers
The first mistake is to buy a beautiful home without running the numbers. You wouldn’t advise a friend to do this with an investment property—so why do it for yourself? Profitable student rentals are possible, but only if you apply the same principles you would for any property investment. Get a rental appraisal, check the yield, assess the upside and equity potential, and look at practical features like parking, maintenance, healthy homes, proximity to uni and shops, sun, and access.

Nailing this step usually comes down to time, energy, money, and experience. But it’s worth the effort—especially when you consider that, alongside your child, three to five other tenants would live in the same property, and you probably want them to stay for several years and look after the home. Also, what we are really aiming for is an investment that you would be crazy to move on from once your child leaves school.

2. Overlooking tax rules
If you rent the property to your child for less than market rent your ability to claim expenses is reduced. So if you’re heavily subsidising their rent, you lose income and you can’t claim all your costs. Talk to your accountant early and plan your approach. The “rent to your child and let them sublet” idea sometimes gets floated, but I haven’t run that by my accountant (my child is also still 14 and into Minecraft – I’m not quite there yet).

3. Overpaying for comfort
It’s natural to want your child to have a warm, dry, comfortable home. But if you overpay, you could be left with an overpriced asset once they graduate. Run the numbers as if the market dropped 10%—would you still have made a good investment? It may have been cheaper just to pay their rent for the entire degree. So you want to make your purchase a good one.

How to Do It Well

If your child is planning to study in another city, you are going to struggle to visit multiple times and learn the market.

A smarter option is to work with a buyers’ agent who knows the local market inside out. For example, at iFindProperty we have full-time property investors on the ground who:

• Help you define your buying criteria and budget
• Connect you with a mortgage and tax advisor to structure your purchase correctly
• Source and inspect properties
• Negotiate the purchase with your investment goals in mind
• Facilitate due diligence. Call in professionals to assess location, tenant appeal, condition, and Healthy Homes compliance
• Assist with arranging any renovation or tidy-up needed to get it to the right standard
• Connect you with local professionals to look after you asset thereafter.

We’ve been doing this for more than 15 years, and many of our team own student rentals themselves. The process is straightforward: we discuss your goals, introduce you to our local expert, confirm your budget and brief, and then start sourcing. Typically, it takes one to three months. Many clients never set even foot in the property before buying—they rely on photos, videos, and trusted professionals opinions to manage the asset.

Final Tip

Even if your child is living in the property, treat it like an investment. I would engage a property manager to do inspections, handle maintenance, and keep everything compliant (and tidy!). Put another way, I would not rent to 18-year-old me, without some pretty constant checks.

Done well, a student rental can be more than just a roof over your child’s head—it can be a smart, profitable step toward your long-term financial goals. Get in touch.